GBP/USD: Pound Remains Weak
Yesterday’s signals were not triggered, as none of the key levels were reached yet.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades must be taken between 8am and 5pm London time today only.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2859 or 1.2920.
Put the stop loss 1 pip above the local swing high.
Adjust the stop loss to break even once the trade is 25 pips in profit.
Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
Long Trade Idea
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2697.
Put the stop loss 1 pip below the local swing low.
Adjust the stop loss to break even once the trade is 25 pips in profit.
Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.
GBP/USD Analysis
I wrote yesterday that if the pivotal point at 1.2859 held as resistance, the price should make another strong downwards movement, with the British Pound being relatively weak anyway on fears over the form of a U.K. / E.U. trade deal.
This was a good call as the price has again failed to rise above 1,2859 and has mostly traded down from there. However, bulls have some hope as the price seems reluctant to really break below the psychological area at about 1.2750.
I think we are going to see a down day today, and I would still be ready to take a short trade if the resistance level at 1.2859 is reached and rejected later on today.
Concerning the GBP, the Governor of the Bank of England will be testifying before Parliament at 9:30am London time. There is nothing of high importance due today regarding the USD.